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French energy giant EDF launches its second huge green bond

US$1.25bn issue the largest US dollar denominated corporate green bond

French state-controlled utility Électricité de France (EDF) has launched a US$1.25bn (€1.1bn) green bond – the largest ever US dollar denominated green bond from a corporate issuer.

EDF is the world’s largest producer of electricity and the bond follows its landmark €1.4bn issue in November 2013. Proceeds from the new issue, like its predecessor, will go towards projects that meet ESG criteria formulated by ratings firm Vigeo.

The 10-year bond has an annual fixed coupon, or interest rate, of 3.625% and will further support EDF’s investments in new renewable energy. The issue was part of a wider $4.75bn bond in five tranches with maturity ranging from five to 40 years. Bookrunners for the green tranche were Credit Agricole CIB, Bank of America Merrill Lynch, Mizuho, Bank of Tokyo-Mitsubishi UFJ, JP Morgan and Citi.

Jean-Bernard Lévy, EDF’s Chairman and CEO, said: “With this new landmark green bond transaction, EDF demonstrates again that it is at the forefront of climate finance.”The offering met strong demand from investors managing environmental, social and governance (ESG) mandates, EDF said – adding it contributed to further diversification of its investor base in the US.

Proceeds will be dedicated exclusively to new renewable energy projects developed by EDF Energies Nouvelles and project selection will follow a “thorough and fully documented” ESG process. EDF added that it would regularly disclose information about how the proceeds are being used and that consulting firm Deloitte would issue an assurance report.

Proceeds from the earlier bond are now financing 13 renewable energy projects under development by EDF Energies Energies Nouvelles in France and North America. The total capacity of these projects amounts to 1.8GW, with a potential annual renewable output of about 7TWh.

Elsewhere, the Indian Renewable Energy Development Agency (IREDA), the government’s main body for financing renewables, has unveiled plans to issue up to INR20bn (€270m) of green bonds by the end of the year.